Children Campaign urges YES vote on Prop 111—cap payday loan rates

Written by: Sarah Barnes
Date Posted: September 21, 2018

The Children’s Campaign is urging Coloradans to vote YES on Proposition 111 to cap the interest rate on predatory payday loans. If passed, payday loans would be subject to the same maximum allowable interest rate for all other installment loans in Colorado.

Payday loans are short-term loans of up to $500. In Colorado, payday lenders can currently charge up to 45 percent in interest, plus fees, so that the average payday loan in Colorado carries an average interest rate of 129 percent.

Addressing predatory lending, such as payday loans, is one strategy to help families protect their earnings and stretch their dollars. Accessing mainstream banking and financial products instead of payday loans can help families save money and stabilize their finances.

Studies show that payday loans impact the health and well-being of children and their parents. Short-term loans and unsecured debt (including payday loans) are negatively associated with children’s socio-emotional development as well as poorer physical health and anxiety in parents. Unstable finances and poor physical and mental health can get in the way of parents being able to provide the care they want to provide for their children.

Payday loans have a disproportionate impact on certain communities. Payday lenders tend to target those with limited credit and banking options. In addition, neighborhoods where families of color live have more payday lending storefronts, even after accounting for income, age, and gender.

For more information about Proposition 111, visit the Stop Predatory Payday Loans website. The full text of Proposition 111 is available on the Colorado Secretary of State’s website.

Sarah Barnes

About Sarah Barnes

Sarah serves as the Policy Analyst for the Colorado Children’s Campaign. Prior to joining the Children’s Campaign in September 2014, Sarah taught middle school English and worked as an Interventionist at Pioneer Charter School in Denver. She was a 2011 Teach For America corps member. Prior to teaching, Sarah worked as an attorney in Denver in the areas of venture capital, mergers and acquisitions, general corporate and business law, and commercial transactions. Sarah earned a BA in English from Midland University and a J.D. from the University of Michigan.